As mortgage rates slowly increase, so do loan origination fees. USA Today reports that loan-origination and other fees went up 6 percent in the last year to a national average of $2,402 on a $200,000 single-family mortgage loan to a customer with stellar credit and 20 percent down, based on data from Bankrate.com. The reason for the parallel rise in rates and fees is two-fold. First, higher rates mean less profit on the money loaned. To compensate for the loss in profit, lenders attempt to make up the difference in fees. Second, the work required in underwriting loans is greater today than it has been in the past, thereby increasing costs. Bankrate’s 2013 survey indicates that Hawaii averages the highest closing costs at $2,912 for a mortgage of $200,000 (excluding taxes, title fees, property insurance, association fees, interest, and other prepaid items). In contrast, Washington has one of the lowest in the nation at $2,208. – See more at: http://dustinkeeth.info/#sthash.LtCW2P5e.dpuf
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Homeowners who sold their principal residences short or lost them to foreclosure have benefited from the Mortgage Forgiveness Debt Relief Act of 2007. But the law expires at the end of 2012, meaning that those households who experience a short sale, foreclosure, or deed in lieu could receive a tax bill the following year. Wisebread explains how it works: Typically, the IRS considers forgiven debt up to $2 million as ordinary, taxable income. The lender issues a 1099-C to the borrower for the balance owed, minus what the home was sold for
The Consumer Financial Protection Bureau aims to safeguard borrowers from risky mortgages . Just this Monday, the CFPB, the government’s consumer watchdog, made a proposal that includes, but is not limited to, these provisions: Ban on balloon payments Prohibition of prepayment fees or fees for modifying or deferring loans Cap on late fees Requirement for borrowers to receive homeownership counseling prior to signing mortgage papers Additionally, new versions of two simplified mortgage disclosure forms have been proposed. The CFPB hopes that the revisions will clarify loan terms and costs so that consumers know exactly what they’re buying into
About 31 percent of all those who refinanced in the first quarter of this year cut their mortgage terms from 30 years to 15 or 20, according to Freddie Mac, reports the New York Times . This marks the second highest level since 2002′s peak of 35 percent.
A short sale is defined as a sale of real estate property where the proceeds fall short of the mortgage debt owed. While all short sales do not necessarily forgive borrowers’ deficiencies (the amount of the unpaid balance), they are often considered more favorable than foreclosures.